THE RISE OF PORTFOLIO FUNDING BY LAW FIRMS IN NORTH AMERICA
The growth of litigation funding in North America has been well chronicled, but less appreciated is the rapid diversification of the market from single case investments toward portfolio funding structures. Portfolio funding is a trend that may have unique applicability to law firms, as it presents the vital opportunity to address longstanding strategic, financial and operational challenges.
We begin with a description of challenges that often arise and how portfolio funding can offer solutions. We also discuss why such challenges are especially prevalent among entrepreneurial law firms in the context of the hypercompetitive North American legal market.
Attorneys that manage growing law firms can be equated with entrepreneurs guiding ventures through turbulent waters; often, they make decisions that impact their firm’s stability and even its viability.
One of the most basic – yet perhaps most critical – decisions that attorneys make relates to case selection. That is, how to manage allocation of the firm’s time, its most precious resource. A firm’s case selection strategy is multifaceted, complex and often bespoke, reflecting the particularities of the firm’s overall strategy and business plan.
Most law firms face similar fundamental resource trade-offs, with significant financial implications usually hanging in the balance. This is particularly the case for litigation boutiques (i.e., small firms of experienced litigators that often take matters at risk), which must exercise higher degrees of caution when considering larger investments, as they could have impact at firm-level.
Jan-Mar 2018 issue
Woodsford Litigation Funding